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BALCO - THE DISINVESTMENT STORY
BALCO-A Profile
STAGE
I: THE TUG OF WAR
STAGE II: THE CONTROVERSY DEEPENS
STAGE III: THE DEBATE
continued
from Page 4
STAGE IV: POST SELL OUT DRAMA
After the sell out of Balco, Jogi continued to fire his
salvo and demanded a parliamentary probe into the deal. Jogi alleged that the
company was sold at a tenth of its actual value. He said, "In a deal in which
property worth Rs.5,000 crore to Rs.6,000 crore (Rs.50 to 60 billion) is being
sold for just Rs.551 crore (Rs.5.51 billion), the circumstances speak for
themselves." In an interview published in a national daily, The Indian Express,
Jogi alleged, "You are talking of transparency. But your transparency is such
that even the chief minister of the state did not know that this company is
being sold. They did not take anyone into confidence. The entire deal was struck
surreptitiously." "Arun Shourie is telling lies. He is a liar. Let him give even
a single example when he consulted me, when he contacted me on Balco," Jogi
charged in the interview. Demanding a probe by a joint parliamentary committee (JPC),
Jogi said, "Whenever such kinds of scams take place, it is not done in the
presence of witnesses. Since big money and big people are involved, it should be
probed." Contending that the deal took place 'without taking the people into
confidence,' Jogi said his government was ready to purchase the company for the
same amount that had been paid by SIL. "It is a question of fighting for the
people's right, especially for the tribals of Chhatisgarh," he asserted.
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Meanwhile, Jogi started instigating the employees to go
on strike, and encouraged them not to let the managers run the plant. On March
3, 2001, the employees launched an indefinite strike. The agitation by the
employees brought the operations of the plant to a standstill. Apart from
productivity loss, there were apprehensions that the employees would resort to
damaging the plant facilities. The GoI moved the Supreme Court to prevent the
state government from disrupting the work at the Balco (Korba) plant The Supreme
Court restrained the Chattisgarh government from disrupting supply of water,
electricity and food to the Balco plant or township at Korba. In its order, the
division bench of the apex court said, "The state of Chattisgarh, and chief
secretary and the director general of police in particular, are directed to
afford full protection to the workers, their families and management inside and
outside the Balco plant at Korba, so that they do not suffer physical harm of
any kind."
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The Parliament witnessed heated exchanges between
Opposition and ruling party with the Opposition questioning the GoI's propriety
in moving the Supreme Court without taking the Chattisgarh State into
confidence. Countering the Opposition charges, Shourie said the Centre had
received 'alarming reports' that water and electricity to the Balco plant would
be cut and the managerial staff would not be allowed to enter the state. He
added that the issue had turned into a law and order problem after an ambulance
was burnt and a CISF van damaged by activists. Dismissing the Opposition's
charge of not consulting the State Government, Shourie said the Disinvestment
Secretary had written to the Chattisgarh Chief Secretary about the disturbing
reports and the possibility of damage to the plant, but there had been no
response.
Meanwhile, the controversy surrounding the sale of Balco continued unabated,
even as Shourie requested the Comptroller & Auditor General, VK Shunglu to
assign officials to scrutinize all documents pertaining to the privatization of
Balco. Major trade unions refused to relent and called for a country-wide
protest on March 20, against Balco divestment. The trade unions also planned a
country-wide strike and hartal. The GoI warned the state government in
Chattisgarh that the Centre could recover the losses suffered by Balco from the
state grants, if it continued its belligerent attitude on the ongoing strike.
The statement said, "The Centre holds 49 per cent share in Balco and if the
Congress government led by Ajit Jogi does not allow resumption of working of the
company, the Centre could recover the money from the assistance given to the
state." Meanwhile, the indefinite strike by Balco workers at Korba, continued
for the fifth day.
On March 9, 2001, the Balco deadlock took a new turn with the senior Balco
officials claiming that the smelter at the plant had started cooling with 40
pots of the cell house of the smelter plant having frozen. To restart
operations, it would require about Rs 50 crore and three to six months time. S.C
Krishnan, managing director, Balco along with four members of parliament rushed
to Korba to review the situation. However, the Balco employees union said that
this would only aggravate the situation. All major trade unions expressed their
support for the 'ongoing struggle of the Balco workers'. Jogi said his
government would provide adequate security to workers and management of the
Balco plant at korba as per a Supreme Court directive and suggested a dialogue
between the workers and management to resolve the ongoing crisis. The management
also appealed to the workers to rejoin work to save the smelter. The management
threatened a lockout unless the employees returned to work. Said a senior
official, "The company has not yet declared lockout. However, if employees do
not return to work, lockout may be inevitable."
On March 12, 2001, the GoI rejected the state Government's offer to buy the 51%
shares for Rs 552 crore, which were sold to SIL at Rs 551.5 crore. It said, the
deal was complete and couldn't be reopened as the GoI had already transferred
its 51% stake to SIL on March 2, the day after Parliament approved the deal.
In April 2001, all central trade unions including Bharatiya Mazdoor Sangh and
INTUC gave a joint call for a nationwide demonstration to express solidarity
with the striking employees in Chhatisgarh. The Trade unions asked workers of
all public sector undertakings to participate in a nationwide strike on May 18,
in support of the striking Balco workers.
In May 2001, the new Balco management offered two months salary advance to the
striking employees to return to work. This was rejected by the union. The
management said it was ready to give the two months salary advance and negotiate
all industrial demands with the workers but not the issue of disinvestment. Also
in May 2001, the Supreme Court asked the workers to resume work on assurance of
advance payment by the Balco management. The Balco management also filed an
affidavit before the Supreme Court that no workers would be retrenched even
though the shareholders' agreement allowed it to do so after a year. On May 4,
2001, a marathon meeting of the union was held to discuss the issue of
withdrawing the strike in view of the Supreme Court's directives. However, the
union failed to take any decision. The union blamed the Balco management for
failure of talks. Said, Brahma Singh, Chief, Balco Bachao Sanyukt Abhiyan Samity,
the apex body of the seven striking unions, "The workers are interested in
joining duty but the management is taking a rigid stand".
On May 9, 2001, a 25-point agreement was signed between the union leaders and
the management. With this agreement, the long drawn out battle between the union
and the management seemed to have come to its logical conclusion. Balco
employees went back to work ending a 67 day strike. The trade unions called off
the proposed nationwide strike on May 18. In a related development, the Supreme
Court stayed all notices issued by the state government to Balco management
asking it to show cause why the land leased to its plant not be cancelled as it
was situated in a tribal land. The court asked the government to justify its
stand in canceling the land allotment to Balco while permitting such allotment
to two other private companies - Daewoo Power and Essar Steel.
ALL'S (NOT) WELL THAT ENDS WELL
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